is Red Tiger NetEnt’s saving grace?

It was a tough year for NetEnt in 2019 despite the acquisition of Red Tiger Gaming. The Swedish gaming provider’s revenue saw a small increase year on year to £143.3 million. This was partly because of the purchase of Red Tiger helped to offset issues in Sweden and Norway. All and all, NetEnt’s revenue for 2019 were mainly royalties, totalling £135 million, down 1% year on year. The setup costs brought in another £44.5 million (up 10.2%). Also, other sources of revenue increased to £20.7 million. According to NetEnt’s CEO, Therese Hillman, the revenue increased in the US but fell in Sweden and Norway. But, Red Tiger is a top performer for the company and contributed £99 million. Hillman said that the company had “exceeded expectation” and would be a vital part of NetEnt moving forward.is Red Tiger NetEnt’s saving grace?

Running Costs Go Up

However, NetEnt expenses also increased by 7.1% to £99 million, which is to take into account in the figures too. The personnel expenditure did drop by 8.4% to £38.8 million. However, this was still its highest yearly cost. Meanwhile, operating expenditures went up 3.9% to £35.3 million. Other costs, such as depreciation and amortization, went up 51.8% to £25.8 million. This gave an overall operating profit of £41.8 million, which is 12% less than last year. But still great as the industry gets more and more competitive.

Breakdown of Costs

In terms of Red Tiger, their income went up 17.4% to £5.7 million. But, unfortunately, their financial expenses tripled to £10.1 million, which meant an overall drop of 4.1% to £33.9 million. Together, with a weak exchange rate, their total income for shareholders dropped 3.1% to £44.8 million. It wasn’t all bad news though. In the last quarter of 2019, they saw their highest quarter ever, up 10% year on year to £40.2 million. Overall, the GB market contributed 19% of their game win, with Sweden contributing 7%. The other Nordic countries contributed 13%, and other European Non-Nordic countries contributed 44%. The rest of the world brought in 19%. Furthermore, slot games made up 94% with table games bringing in 4%. So as you can see, Red Tiger is looking good for 2020. And NetEnt is looking forward to a strong year overall.